What if the Bank of Japan intervenes to defend the yen past 165?
Smaller carry wobble: spot FX intervention past 165 buys time but not trend — USD/JPY dips modestly and carry receivers (AUD, EM FX) soften without a full unwind. Rhyme is the 2022 and Apr/Jul-2024 MOF/BOJ interventions, which produced sharp but short-lived yen pops that faded until the rate-differential actually narrowed. Forward angle: intervention treats the symptom, so the durable yen turn needs BOJ hikes or Fed cuts to close the gap; fade JPY strength on intervention alone — the carry stays intact until the rate spread moves.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a mixed shock. The BOJ intervenes to defend the yen past 165/USD. The trigger decomposes into signed root‑shocks — FX carry appetite ▼ — which propagate through our causal graph to the markets below.